CGT on sale of plot

[dotto]

My two sons and myself live in and jointly own a property at the end of a longish drive, the drive having land running alongside one side of it for which we have obtained detailed planning permission for 2 detached properties. We have a buyer for the middle plot (plot 2) which lies between our property and plot 1. My two sons would like to build and live in a house on Plot 1, leaving me living in our current property, a bungalow. They will still own one third each of the bungalow and we each own one third of Plot 1. I am not interested in the build on plot 1 and would like to sell my one third to them, before the build is commenced. I realise that if we simply sell Plot 1 to a third party to build a house, we won’t incur any capital gains tax as the land is our garden. If my sons build they intend living in the property indefinitely. I am not sure of my position, and indeed their position, as regards capital gains tax if I sell my share of the plot to them. My share is worth approximately £50,000.

I hope this is clear enough and your advice would be much appreciated.

[mullet]

What is the area of the entire property as it is at the moment?
Is all of the land garden?

[dotto]

I'm not sure of the exact area but its less than half an acre. The area is currently garden, mainly grassed.

Thank you

[mullet]

If you sell your share to them prior to the build commencing (that is very important - i.e. before the first turf is lifted) then your disposal will indeed be free of CGT as it will be a disposal of garden from an area less than 0.5 hectares. The timing is crucial - once work has started the land will no longer be "garden/grounds serving chiefly for ornament or recreation".

[dotto]

Hi
Your response has been a great help.

Many thanks for giving your time.

kindest regards

Dorothy